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Methods for Ex Post Economic Evaluation of Free Trade Agreements

Author

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  • Cheong, David

    (Johns Hopkins University‘s School of Advanced International Studies (SAIS) Bologna Center)

Abstract

Evaluating the economic impact of an FTA is an important part of the monitoring and surveying process that should follow the establishment of an FTA. This paper presents methods for evaluating the trade and welfare effects of an FTA. These methods show how to (i) compute indicators for the utilization and value of preferences, (ii) qualitatively assess trade creation and diversion, (iii) quantitatively analyze the FTA‘s trade effects with trade indicators and the gravity model, and (iv) make inferences about economic welfare. This paper specifies the formulas, computational techniques, and data used for each evaluation method, and describes how to interpret the output from each method with examples taken from countries such as Viet Nam, Indonesia, and Cambodia. The strengths and limitations of each method are also discussed.

Suggested Citation

  • Cheong, David, 2010. "Methods for Ex Post Economic Evaluation of Free Trade Agreements," Working Papers on Regional Economic Integration 59, Asian Development Bank.
    • Handle: RePEc:ris:adbrei:0059
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    References listed on IDEAS

    as
    1. Carsten Kowalczyk & Raymond Riezman, 2013. "Trade Agreements," Palgrave Macmillan Books, in: Daniel Bernhofen & Rod Falvey & David Greenaway & Udo Kreickemeier (ed.), Palgrave Handbook of International Trade, chapter 13, pages 367-388, Palgrave Macmillan.
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    Cited by:

    1. Agnieszka Sapa & Agnieszka Baer-Nawrocka, 2014. "Konwergencja wydajności pracy w rolnictwie a intensywność handlu rolno-żywnościowego w amerykańskich ugrupowaniach handlowych," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 111-131.
    2. Anwesha Basu, 2022. "The India–EU FTA and Its Potential Impact on India’s Dairy Sector: A Quantitative Analysis," Foreign Trade Review, , vol. 57(1), pages 7-26, February.
    3. Hansa Jain, 2019. "Implications of SAFTA for Indian Economy: Trade, Compatibility and Welfare Effects," Foreign Trade Review, , vol. 54(4), pages 355-374, November.
    4. Abueg, Luisito, 2018. "Survey of gravity models of trade and labour, and a proposed trade-employment gravity model for the Philippines," MPRA Paper 87256, University Library of Munich, Germany.
    5. Ekaterina Y. ARAPOVA, 2017. "Ex-Post Analysis Of The Influence Of Tariff Liberalisation On Asean Exports," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 17(2), pages 135-154.
    6. Nawrocka, Agnieszka Baer & Sapa, Agnieszka, 2013. "Agricultural Labour Productivity and the Intensity of Agri-food Trade in Selected Regional Trade Agreements," 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152381, International Agricultural Trade Research Consortium.
    7. Eduardo I Palavicini Corona, 2021. "Globalisation and local economic development: Place-based and bottom-up public policies in Switzerland and Mexico," Local Economy, London South Bank University, vol. 36(2), pages 98-114, March.

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    More about this item

    Keywords

    regionalization; evaluation methods; preferential tariffs; trade indicators; gravity model; free trade agreements; Asia;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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